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The UK plastic packaging tax – does your business need to comply?

4-minute read

Sam Bromley

21 March 2022

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A new UK plastic packaging tax will be introduced on 1 April 2022. It may apply if your business manufactures or imports plastic packaging components.

The government is introducing this tax change for 2022 to discourage the use of single use plastics. It’s likely to impact lots of different businesses, from retailers to manufacturers, so find out what it means for you.

Do I need to register for plastic packaging tax?

You need to register for plastic packaging tax if your business manufactured or imported more than 10 tonnes of finished plastic packaging components within the last 12 months, or it will in the next 30 days.

Because it’s a new tax, HMRC will work out the 12-month threshold differently between April 2022 and March 2023 (by only going back to April 2022).

Registering for the tax doesn’t necessarily mean that you’re liable to pay, because there’s an exemption for packaging that contains at least 30 per cent recycled plastic as a proportion of its total weight.

That being said, if you don’t think you need to pay, you need to keep accurate records and show evidence. The assumption is that the plastic isn’t recycled until you can prove otherwise.

What plastic counts for plastic packaging tax?

Plastic is defined by gov.uk as a “polymer material to which additives or substances may have been added” and doesn’t include cellulose-based polymers that haven’t been chemically modified.

Additives like calcium and dyes are counted as part of the plastic for the purposes of plastic packaging tax.

The tax is chargeable for each finished packaging component, whether you import it or the finishing takes place in the UK. It’s also charged even if the plastic is already filled with goods.

You should also consider other materials in the plastic component. If it contains more plastic by weight than any other component, it counts as plastic. Other materials to look at include glass, steel and wood. You need to keep records that show what other materials are in the plastic.

The tax is charged on plastic that’s intended for use:

If packaging is made up of different plastic components, then you need to account for the tax on each component (for example, a box that has both a plastic window and a plastic tray). This means you’ll need to know the weight of each component.

What about recycled plastic?

According to gov.uk, recycled plastic has been “reprocessed from recovered material by using a chemical or manufacturing process.”

This can be recovered from both pre-consumer plastics (waste generated during manufacturing processes) and post-consumer plastics (plastic thrown away by end-users that can’t then be used for its original purpose).

Plastic components containing 30 per cent or more recycled plastic aren’t chargeable for the tax, but you still need to register if you go over the threshold, plus keep all necessary records.

Weighing components for plastic packaging tax

As plastic packaging tax is charged by weight, this means you need to know the weights (in kilograms) of each component you manufacture or import. You should also know the percentage of recycled plastic content.

These weights help you work out whether you need to register and how much tax you need to pay.

There are different methods available for working out weights:

  • individual component (weighing each item)
  • sample component (weighing one item then using that weight for the rest)
  • material inputs (for production runs that manufacture identical products, you can divide net weight of each material by the number of components)
  • verified specification (the weights given on the product specification)
  • bulk weighing (dividing total weight of all components by the number of components produced)

How to register for plastic packaging tax 2022

You can register for plastic packaging tax from 1 April 2022. You may need your:

  • business type
  • business address and contact details
  • date your business needed to start paying the tax
  • estimate of how much finished plastic packaging you expect to manufacture or import in the next 12 months
  • customer reference number (this may be a corporation tax or Self Assessment unique taxpayer reference, or a National Insurance number)

You’ll get a reference number after you’ve registered and you need to keep all the records necessary to complete your plastic packaging tax return.

How to do a plastic packaging tax return

This is due every quarter and is aligned with your accounting period. Accounting periods are:

  • 1 April to 30 June
  • 1 July to 30 September
  • 1 October to 31 December
  • 1 January to 31 March

You need to give the total weight in kilograms of plastic packaging components manufactured or imported by your business in the accounting period.

Accurate record keeping is really important, as you need to have supporting information that shows your calculations. You have to keep records for at least six years from the end of the accounting period they cover.

Your records also need to prove that you’re exempt, or your packaging has at least 30 per cent recycled plastic.

Returns and payments are due by the last working day of the month following the end of the accounting period. If you don’t submit and pay on time, your business may be hit with late penalties and late payment interest.

How do I comply with plastic packaging tax?

The new tax brings with it administrative complexities for affected businesses. If you need to register for and pay the tax, it’s important to:

  • assess your business’s current situation and see whether you’ll be liable
  • review supply chains to see whether you can reduce your reliance on plastic
  • set up a system to keep accurate records on the plastics you use
  • make an individual or team responsible for complying with and paying the tax
  • train relevant staff on the tax

As it’s a complex tax, it’s important to get all the detailed information you need from gov.uk too.

Will you be subject to plastic packaging tax? Let us know in the comments below.

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We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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